Landlord & property accountant in West London
Know the real rental profit, the tax building up, and what changes when you sell.
SV&Co helps landlords and property owners across Southall, Ealing, Hayes, Wembley and wider West London with rental accounts, Self Assessment, MTD, property expenses, jointly owned property, Capital Gains Tax and property-company questions.
Rental income, taxable profit and cash in the bank are three different numbers.
Mortgage payments, repairs, improvements, tax and MTD rules can all change the answer. We start by separating the numbers properly.
Rental profit
HMRC taxes the property profit, not simply the rent received.
Rental profit starts with property income and deducts allowable running expenses. Residential finance costs for an individual landlord are then dealt with separately through the finance-cost tax-reduction rules.
Example: one rental property
- Rent received: £24,000
- Agent, insurance and repairs: £6,000
- Property profit before residential finance-cost rules: £18,000
- Mortgage interest: £8,000
An individual residential landlord does not simply reduce the £18,000 to £10,000 by deducting the mortgage interest. Instead, HMRC’s basic-rate finance-cost tax reduction is considered separately.
The £1,000 property allowance
Individuals can have a property allowance of up to £1,000 a year. Depending on the circumstances, it can sometimes be used instead of actual property expenses.
If gross property income is £1,000 or less, it may be exempt, subject to the exclusions in the rules. Where actual expenses are larger than the allowance, claiming the actual expenses may be more sensible.
Mortgage interest
For an individual residential landlord, interest relief is not a normal expense deduction.
Since 2020/21, residential property finance costs for individuals are restricted to a basic-rate Income Tax reduction. Companies are outside this individual-landlord restriction and generally deal with finance costs under company tax rules.
Why this matters
A landlord can have modest cash profit after paying the mortgage but a much higher taxable property profit before the finance-cost tax reduction. The effect is particularly important for higher-rate taxpayers.
Making Tax Digital for landlords
MTD uses gross qualifying income before expenses.
For MTD for Income Tax, HMRC combines qualifying personal self-employment and property income. The first cohort entered MTD from 6 April 2026 where qualifying income on the 2024/25 return was over £50,000.
£50,000
Over this on 2024/25 return → MTD from April 2026.
£30,000
Over this on 2025/26 return → April 2027.
£20,000
Over this on 2026/27 return → April 2028.
Digital records
Income and expenses must be recorded in compatible software where MTD applies.
Example
£28,000 self-employment income plus £25,000 gross property income gives £53,000 qualifying income before expenses. The sources can combine even though the activities are completely different.
Selling a rental property
The CGT deadline can arrive long before the next Self Assessment deadline.
For taxable gains on UK residential property, an individual may need to report and pay Capital Gains Tax within 60 days of completion. The current individual CGT rates are generally 18% and 24%, depending on how much of the gain falls within the unused basic-rate band.
Sale proceeds
Start with the disposal proceeds.
Deduct allowable capital cost
Purchase cost, qualifying acquisition/disposal costs and qualifying capital improvements.
Apply losses / reliefs / exemption
Private Residence Relief or losses can materially change the result.
Report and pay
UK residential property gains can require action within 60 days of completion.
2026/27 Annual Exempt Amount
The current CGT annual exempt amount for most individuals is £3,000. It is one annual exemption across gains, not a separate £3,000 allowance for each property.
Interactive landlord tools
Understand the mechanics before we review the detailed tax position.
Official basis: GOV.UK / HMRC
Last checked: 16 August 2026
Live site will use SV&Co Official Data Hub
Rental Profit Illustration
Shows the difference between running expenses and residential finance costs.
Simple Property CGT Illustration
Educational screening only. It deliberately excludes Private Residence Relief and other specialist adjustments.
Landlord tax FAQs
Questions we regularly need to separate properly.
Does mortgage interest reduce my rental profit?
For an individual residential landlord, finance costs are generally dealt with through the basic-rate tax-reduction rules rather than simply deducted from rental profit. Companies follow different rules.
Do I add my rental income to my sole-trader income for MTD?
Yes, relevant personal self-employment and property income can combine when HMRC tests MTD qualifying income. The test uses gross qualifying income before expenses.
Can I claim the cost of a new kitchen?
It depends whether the work is a repair/replacement or a capital improvement. Restoring an existing asset can be revenue in nature, while significant improvement or enhancement can be capital. The actual work and old/new specification matter.
Should I put my rental property into a limited company?
Not automatically. A company can change the tax treatment of finance costs and retained profits, but transferring an existing property can create CGT, SDLT, refinancing and legal issues. The long-term plan matters.
How quickly must I report a residential-property capital gain?
Where UK residential-property CGT is reportable, the current rule generally requires reporting and payment within 60 days of completion.
Can my spouse and I simply choose any rental-income split?
No. Spouses/civil partners living together are normally taxed 50:50 on jointly held property income. Form 17 can apply only where the genuine beneficial ownership and income entitlement are unequal and the conditions are satisfied.
Reviewed by
Sandip Vadher, PhD FCCA
Founder of SV&Co Accountancy. Fellow Chartered Certified Accountant with more than 20 years of finance and accountancy experience.
Landlord & property tax review
Tell us what you own, what rent comes in and what decision you are facing.
Annual rental accounts, MTD, expenses, joint ownership, selling a property or considering a company structure.
Useful information to send us
Rental income, property expenses, mortgage-interest statement, ownership split, purchase date/cost, current estimated value and whether you also have self-employment income.
Landlord accounting can involve rental records, allowable expenses, Self Assessment, capital gains and ownership decisions. SV&Co provides connected property tax and accounting support.